Sunday, September 1, 2013

Money
may not buy you love but it might buy you happiness if you spend it in the
right way, US researchers say. In studies they found that the old adage
"it's better to give than to receive" is correct: spending money on
others or giving to charity puts a bigger smile on your face than buying things
for yourself.

"Most people would think that if you make
more money you are going to be a lot happier," said Michael Norton, a
professor at Harvard Business School. "Our results, and a lot of other
people's results, show that making more money makes you a little bit happier,
but doesn't really have a huge impact on you. Our studies suggest maybe that
little changes in how you spend it make a difference."

The
researchers' work was published in the journal Science in 2008. Norton and his
colleagues questioned 632 Americans about how much they earned and how they
spent their cash. They also asked them to rate their own happiness. Regardless
of income level, those people who spent money on others reported greater
happiness, while those who spent more on themselves did not.

In
a second study, the team questioned 16 employees in line for a company bonus of
$3,000-$8,000. The team asked the subjects about their happiness before and six
to eight weeks after the bonus, and how they spent the money. The size of the
bonus did not determine how much happiness grew. Instead, the amount spent on
others or given to charity was correlated with how much individuals' happiness
levels had risen.

The
team also gave 46 volunteers either $5 (£2.50) or $20 to spend. They instructed
the participants to spend the money on themselves or someone else. Again, the
altruistic group reported feeling happier whatever the size of their gift.
Norton said: "So instead of buying yourself a coffee buy your friend a
coffee and that might actually make you a happier person."

Professor
Stephen Joseph, of the University of Nottingham - an expert in the psychology
of happiness who was not involved in the study - said: "Most of the
research in the past has said money isn't that important in terms of happiness.
The things that are important are things to do with relationships, with other
people, and things that help to promote meaning, the purpose in life. I think
that's what this study speaks to."

Although
the clear implication of the study is that altruistic spending will make you
happier, Joseph said it would be wrong to use the research to formulate advice.
"Being prescriptive about how people spend their money, even if it is for
seemingly worthwhile causes, is a very dangerous path to go down. Research like
this describes society - it doesn't tell us what society ought to be."

Professor
Ruut Veenhoven, of Erasmus University in Rotterdam, said the study showed that
the economic view of human motivation was incorrect. "This may come as a
surprise for economists who have learned that humans are essentially
egoists," he said. So why don't people give more money away to make
themselves even happier? "Often people don't know what really makes them
happy," he said. "Doing nice things to other people isn't so bad after
all."

The
Guardian, Friday 21 March 2008 James
Randerson, science correspondent.